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tv   [untitled]    July 5, 2012 4:30pm-5:00pm PDT

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of policy and operations. i would like ask if nancy can come and present on the financial crisis. >> good afternoon writ -- good afternoon. i am happy to present an update on the school district's budget for you. what you have in front of you is a pretty thorough update. i would be glad to respond to any requests to move along a little more quickly if that is something you would prefer. i just wanted to start by letting you know the guiding principles we have for our budget process. we are looking to fight for long-term solutions, considering our students with a high as the, prioritizing things that directly impact students. we are willing to change the status quo where we need to move forward in a better way. we are planning thoughtfully,
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keeping our district as healthy at -- as healthy as possible and in gauging the community. a quick recap to the state budget. governor brown propose a budget for this coming year that had a gap of $15 billion. there were significant cuts to k-12 education. about $6.3 billion statewide. he is counting on the measures in november to pass. if there is not passage of those measures, there would be an additional cut for the school district. for us, that would be the equivalent of about five f urlough days. a significant cut if the budget does not pass in november writ it would hold our budget flat
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this year. we have had several cuts in place over the past school year. 4 furlough days and these would be maintained under the current scenario. as you can see at the bottom of the slide, the trigger cut would be -- it has gotten a little bit worse in the coming days. -- in the last few days. when we look at our budget, we have some positive signs from where we were in january. there is state transportation funding that came back in may, about $7 million. we recently sold one of our surplus properties and that is resulting in a reduction of debt
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service of about $875,000 annually. you mentioned the rainy day reserve, which we are clearly thankful for. that helped reduce the gap by about $27 million. on the other hand, we do have the midyear cut which could be coming our way. and we have a number of districts around the state that are in a negative or qualified financial position, meaning they are not able to show that they can have a positive balance for the next three years. we are doing our best to avoid that. when we look at our unrestricted general fund, which is the money that we used to cover the basics of all of our operations in the district, on slide 7, it gives you a little bit of an outline. we are starting the year with about $46.2 million in the bank. we expect revenues of about $331
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million. but we are spending about $362 million. as you can see, it puts us about $30.4 million over revenues. our ending balance will decrease. we require reserves that are part of the ending balance, meaning we will end the year in june of 2013 with more than we are required to end the year with by state law. that puts us dangerously close to a negative or qualified financial position. the multi-year projections show the need for additional cuts. >> could you repeat what you just said about the numbers you just gave? >> our revenues that are coming in this year are about $30
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million less than what we are projected to spend next year. if you look at what we have coming in, luckily, we have a beginning dallas that will allow us to cover that $30 million. but we end the year with only $230,000 more than the very base necessary we need to meet a positive financial status. that is with the cuts that the board of education adopted on tuesday of this week. it is not level of spending we would want to be, including the furlough days and other parts of the budget. the other revenues, and we mentioned a few of them, are the city's rainy day fund, which we are counting in this budget. we are happy that the sales tax is projected to increase. we do not have the federal jobs fund any more.
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it is no longer funding we will have coming our way. we have mandated cost revenues that are accounted for in the state budget but we do not have a budget line item for them. they are not projected to come in for this coming school year. we do not have funding there. when we think about our expenditures, we are reflecting a number of reductions. the 4 fou -- furlough days, we have made cuts to sabbaticals, cut teacher services. we do not have the support from previous years that we would like to have again. we have reduced professional government, summer school, and general education transportation. we also have some cuts to the english-language arts adoption. as well as special education and
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health and pension benefits. we have made a number of cuts to make sure we are able to squeeze within the dollars that we have. as we look at special education as a specific area, the unrestricted general fund contribution is increasing because of our student population. we have stagnant revenues from the federal government and state government but our personnel costs continue to increase because of the natural growth of employees' salaries. we have non-public schools and agencies that were under- budgeted and continue to grow. we also need to add professional development to make sure we are covering the needs of our students. and to have investments in data analysis so that we are providing the services we need. delving a little bit into the details, there is a group of programs from the state called tier 3 programs which are
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programs that were once restricted and dedicated to certain services for children that have been made flexible. we looked at that group of spending and identified $18.5 million that we are able to use in other ways to use our or -- to reduce our overall deficit. we have redirected those funds to the general fund in those categories. we have a number of programs receiving funds for the original intent of those specific line items. the biggest one is the targeted structural improvement block grant, which is a grants specifically targeting underserved students. as you mentioned, supervisor mar, concentrating on a-g, credit requirements. we have a number of different people working on that in
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different ways and we are thankful for the city's contributions to those efforts. >> is there a quantifying of how much it would cost to provide the additional 7th period support for the identify high schools so that as many students graduate with those requirements as possible? is there a number that it would cost to pull funds out? >> there is. i do not have it off the top of my head right now. but we could certainly get you a number to quantify that. as we look forward, we always want to make sure that we are assessing the equity of our spending. we are continually doing that as we make cuts to our budget and balance it in a way that focuses on the board's priority. looking a slide 14, this gives us a summary of the multi-year projections of our budget.
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you can see in the second column the amount of dollars i just went over earlier, starting with the beginning balance of $46.2 million. after we go through our expected revenues and expenditures, we would end the year with an undesignated reserves of only $230,000. we're going into fiscal year 2013-2014 in a very precarious position. we would begin the year with $15.7 million, most of that designated reserves in the prior year. and we would end the year with a $38.4 million negative balance after accounting for the required reserve. it is something we are very concerned about. we would have to have additional cuts in order to maintain a positive financial position. i'm going to stick our next
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slide because this is about the passage of the budget, which the board did on tuesday. lastly, i want to give you a little bit of information about where we are in terms of our per-ada revenue in terms of where we should be given our projected amount we should have gotten under proposition 98. this chart looks a little bit like an alligator. in 2007-2008, we got about $5,076 per ada. if it remained flat, we would be in the same spot where the purple line is across this diagram. if that had been increase based on the requirements, looking at the cost of living increase, we would be at the light blue line, which is $6,697.
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instead, we have had a series of cuts, bottoming out in 2009- 2010, and we are now at the orange line, projected to be $5,204, significantly less than the $6,797 that we should be at. we are losing 22 cents on every dollar from prop. 98 that we should be receiving. if the measures on the november ballot do not pass, we would be at the level of the black line, or $4,764, taking the even bigger cut to our budget and the educational services that we were able to provide for our students. >> that is about $500 less per student for the 56,000 students in the district if the revenues do not pass? >> that is correct.
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it is just shy of that. a significant blow. in addition to this amount that is in excess of $75 million between the blue line and the orange line. lastly, just to give you a little bit of contact nationally, you in the far right that we are significantly below the average for national funding for schools. california funding per student has continued to decrease over the course of the last few years. leaving us less and less able to do what we need to do to provide services. i would be happy to answer any question that he might have or provide additional information as needed. >> i really appreciate the thoroughness of the report. the experts are sitting across
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from supervisor olague and i. sorting through the difficult process of cuts year after year in the school district. my hope is you have provided some leadership of what funding the city could provide in difficult times like this. if there are no comments, can we ask monique from the comptroller's office, who i think was your earlier -- it looks like she may not be here. we will wait. proposition 8, -- h, is an important support that the voters supported for the schools. over the past four years, because of the city's financial crisis, instead of paying roughly $40 million per year to the school district plus $20 million to pre-k for all, it has
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roughly been about $30 million per year, so there has been about $10 million deferred over the last four years, meaning roughly $39 million has not been paid to the schools. according to prop h, that money is supposed to be paid back in 2015 at the end of the prop. h funding. . my hope is it is revised by the education community. until that time, if we have additional surplus funds or other types of resources, we should be paying some of that back right now and not wait until 2015 given the dire economic crisis within the school district. that is some of the questions we were to be asking to money from the comptroller's office. -- monique from the comptroller's office. we will wait until she arrives.
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i would like to invite members of the public, not community groups, and teachers. i will ask the first couple of speakers to be the representatives from the youth commission. we have the president and vice president, so welcome. >> hello. good afternoon. the use commission heard this hearing on june 18 and we supported during request. we are really excited to be here and seeing that the city is taking a commitment to our public schools in san francisco. one of the things that are commissioners came up with was how was this money going to be spent in the school district? a few things came up in our discussion. we understand that sfusd is facing a lot of cuts from the
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state. we just hope that, with the additional funds, if the city does decide to do this, that these funds would go towards student-supported services, that the money would go not necessarily to the administration, but that the students will see it. a lot of the cuts will affect the students. for things like credit recovery, that is one thing we thought of. adding a 7th period to the schedule would help students and a lot and they would see the benefit of these funds. that is where we are at. we thank you for your time. >> hello, supervisors and commissioners. i just graduated from high
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school and i am going to harvard in the fall. to reiterate what she said, last meeting, the use commission has a really overwhelming question about how this money will be spent and what kind of authority the city would have. from my own experience, i really support the school district to receive the money. give the money to the school district because they face such a huge deficit. we do not want any more furlough days. if the city does decide to give the money to the school district, i hope will be spent on helping out the most vulnerable students and schools that have the least resources. when i first entered the school district as a 10th grader, i was
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an english language learner. compared to my later years, regular classes or honors classes, i really felt immigrants or students do not have a lot of resources. i do not feel like there are a lot of meaningful after-school programs. i did not feel my classes were really challenging. i went to thurgood marshall and transferred my junior or senior year. different schools have different kinds of resources. i hope the schools without as many resources could get more of this money. the school the struggle the most will learn more if they got more resources, not more ap classes, after-school programs,
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that kind of thing. i really hope the school district gets this money. thank you. supervisor mar: thank you. we now have money -- monique from the comptroller's office. the main issue is the money that was obligated for the public enrichment fund, prop. h. if the money is deferred by $10 million over four years, what is the process of the city to fulfil its obligation to pay that money back to the school district?
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and i know how busy it is for the comptroller's office, so i really appreciate your presence here. >> good afternoon, commissioners and supervisors writ i am the -- i am from the comptroller's office. the comptroller has a responsibility to manage the budgeting for the public education enrichment fund and we are required, on an annual basis, to receive the plans from the school district, review the plans, how the money will be spent, what the performance measures are, what the actual performance is, and to make a recommendation to the board of supervisors to accept those plans. for the public, just as a matter of background, the public education enrichment fund was created for the charter in 2004.
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one-third of the funds goes to the first five commission, also known as the children and families commission for universal access to preschool. the other two-thirds goes to the school district. one-third goes towards sports, library, arts and music programs. the other third is to be used as the district for furs. in prior years, the second one- third was used for teacher salaries or for other teaching- related activities. the fund expires in 2014-2015. in order to continue it, it will have to be reauthorize and proposed to the voters. the mayor himself will be working to begin that process for the reauthorization of the public education enrichment fund. it also requires that, near the
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end of the program, the comptroller's office provides an analysis and evaluation of the efficacy of the program and so forth. we did an scags that was an allocation of the school district and everything was in order and funding spent in accordance to the requirement of the charter. when the stram started, it was $15 million, grew to $30 million and then $45 million and then $60 million. this is divided for the two departments, one-third to the first five and two-thirds to the schools. after the $60 million mark, that amount grows in accordance to the growth of our general tax revenue in the city and county. for fiscal year 2013, allocation is actually 7.855 million. so it has grown significantly
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from the cap of $60 million a number of years ago. the charter section also allows the city to defer up to 25% of this allocation in those years where the city has a deficit of $100 million or more. than has occurred for a number of consecutive years. the mayor and the board of supervisors has opted to defer up to 25% for both the first five commission and is the school district so the 25% for this coming fiscal year has a value of $17.7 million, leaving a direct allocation of $53.14 million. so for the unified school district, there is also
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stipulation in the charter that allows the city to provide in lew of cash -- lieu of cash in kind services. this coming fiscal year, cash allocation will be $32.68 million or $7.75 million in in-kind services. these are services provided by the city to the schools on school property. so the total -- >> what are examples of -- >> nurses and direct service providers. we also found in our review of the plan of the unify school zrick's proposal does meet the requirements and intended uses of the charter and we noted that the funding is used for hundreds of staff equipment, materials and professional development within the school district.
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so in looking at the other resources that are provided by the city to the school district so we have a direct appropriation of 32.79. this is a little more than the piece because we also provide a little over $100,000 towards the superintendent salary. the in-kind contribution i just spoke of, of $2.75 million. above and oned that over $21 million of additional in-kind services. some of that might be reduced rate for electricity. free passes to the museum to school children. as well as a lot of mental health services, substance abuse treatment services, nursing services are provided by the department of public health and other kinds of violence prevention that maybe provided through the department of children youth and families.
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so the total city contribution on an annual basis is $56.8 million. and then finally, in trying to look longitudinaly of how much money has been allotted to the schools from the city over a time period, we're taking a look at fiss carrier '05/'06 through the two-year budget period. this is the first time city and county is considering approving a two-year budget. the public education enrichment fund was enacted in 2004 and the money first came in, in 2005 and '06. so what you see here is the allocation of the piece dollars starting $10 million the first year, $71 million the current year. school districts share so the school districts share its infancy of the program at $7
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million and is now at $47 million. this bolded amount is the deferral amount, so this is the amount of the trigger that was pulled in those years, first time was in fiscal year 89. '8 million deferred and $10 million for two years and $11 million in the current years and next two years we're estimating $12 million. so the cumulative value of that is $62 million but that includes the next two years. in-kind allowance, value of that. and then the net contribution from the city. above and beyond the actual cash that is provided to the school district, the charter requires the city maintains the value of
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the services provided before it was enacted. d.c.s. used to provide services to the school before the charter section was enacted and those dollars affiliated with those services have to continue and they have to grow with the growth of revenue so as you see we started out way back in those years providing $5 million worth of services and that has grown to about $7 million a year. and the final amount is the city's rainy day reserve. the city enacted rainy day reserve about ten years ago and the threshold for depositting to that reserve is when we have a higher-than-expected revenue. and we put that money away for a rainy day during the economic downturn. and in fact what has occurred is that the city has now been able to withdraw from the rainy day